I looked into this briefly with an attorney, but since it's not a topic to be discussed with my folks, I did not follow up. So, for those of you in the know, am I right, or are the options as posted by Bob_Smith really all that simple?
John - No! It's not that simple. I listed some options we chose, but they aren't all right for everyone (except the compound inflation rider), and there are many more issues to understand before contacting an agent. One of the most important is this: how much coverage do you need? For us that involved these steps:
--Determine all sources of income.
--Work through a worst case scenario and determine how much you can afford to pay out of current income sources for LTC. Worst case scenario usually involves one spouse in a nursing home and the other still in the community. With both in a nursing home the expenses of operating the household in the community can be reduced to almost nothing. That frees up existing funds to apply to LTC. But it could be pretty tough to support both infrastructures simultaneously. We went with the entire cost of a good home in our area.
--Determine current nursing home costs. I called around and checked with homes I knew to be good.
--Once you have that data you can determine, very roughly, how much you would need today.
And there are many, many other variables:
--Deciding on a lump sum payment wasn't an easy choice, for example. We have no regrets; it made our planning easier, we're done dealing with it, and we avoid future increases. But convincing arguments could be made against it.
--Some policies offer assisted living facility and in-home benefits. We went with those.
--Selecting an elimination period is important (we chose 90 days).
Other issues:
--Making sure you're covered in every state
--Making sure you understand WHO determines whether ADLs are impaired, and HOW that is determined.
--Checking the company's service reputation (are they a pain to deal with or do they have a rep for paying without hassles?)
--Making sure Alzheimer's is covered, and understanding what conditions must be present before coverage kicks in
--Understanding the term "eligible facility"
--Understanding what has happened in the past, in your state, if a company goes belly-up. In my state there is a guarantee fund for folks who currently are under claim. For those who aren't, bankrupt companies have been sold to other carriers who have assumed the policies (so far), but there's no guarantee of that occurring.
--understanding all the various riders - which ones to select (like compound inflation) and which ones NOT to select.
--and on and on and on...
It's not simple, but we found it was doable with hours of research, asking many questions, etc. I probably spent a good 20-30 hours of time on it, and I was working FT at the time. I had the advantage of working with a good agent in a very small town. I think small town insurance agents are more likely to be aligned with the customer. If something goes wrong, word spreads fast. Likewise, if they treat you very well, word spreads fast.
K.B. - yes on the weight. My wife is 5'0" tall and 104 pounds (I'm 6'5" and 210 lbs.) She put 98 lbs (if memory serves) on the app., which she believed to be true the last time she weighed. That was too light. Of course we thought thinner is always better, and didn't give that much thought. But apparently thinner is not better here.
The costs were in three tiers (standard, preferred, and preferred plus). For each category there were different charges for each of of the three options (lump, 10 year, annual). For the lump sum option the charges (per person) were $25,756 (standard); $20,605 (preferred); and $15,454 (preferred plus). Having an agent who can (and will) catch things like the weight issue has the potential to save quite a bit - in this case it saved around $5,000 (the difference between preferred and preferred plus on my wife).